DAILY NEWS RECAP - PAPAヽPANDA (29/04/2021)

 

'Damn Huge': Germany Opens Up to Institutional Crypto Funds

In Germany, new legislation enabling managers of the most popular institutional investment funds—the so-called Spezialfonds—to allocate 20% of them to crypto-assets is set to come into force on July 1.

The law cleared Germany’s federal parliament, the Bundestag, last Thursday, and is due to be rubber-stamped by the country’s Federal Council imminently. It will apply to both existing Spezialfonds and to new ones set up by institutional investors such as financial institutions, insurance companies, and pension funds. In all, around 4,000 existing investment funds will now be eligible to invest in Bitcoin and other crypto assets, Sven Hildebrandt, CEO of Germany-based Distributed Ledger Consulting (DLC) told Decrypt. 

“This is damn huge,” Hildebrandt said. Around €1.2 trillion ($1.8 trillion)  is invested into Spezialfonds, which have fixed investment conditions, and “right now, 0% of the funds are invested [in cryptocurrencies], because they're just not allowed.”

“This won't happen overnight, but we are talking about the largest investment vehicle that we have in Germany—literally all the money is in there,” he said. Theoretically, up to €350 billion ($422 billion) could enter the crypto market from Spezialfonds alone, he explained. (For comparison, Bitcoin’s current market cap is $1 trillion.

Japan’s Games Maker Nexon Spends $100 Million to Buy Bitcoin

Japanese games maker Nexon said on Wednesday it has spent around $100 million to buy bitcoin, joining companies like Tesla in lending support to the cryptocurrency.

Nexon said it has used less than 2% of its reserves on the purchases, which were made at an average cost of $58,000 per bitcoin.

“We believe bitcoin offers long-term stability and liquidity while maintaining the value of our cash for future investments,” Nexon CEO Owen Mahoney said in a statement.

Nexon has been investing in entertainment companies like Konami as it looks to put its cash reserves to work.

Turkey to Establish Custodian Bank for Bitcoin Exchanges

Following the collapse of two local cryptocurrency exchanges and new regulations banning cryptocurrency-based payment services, the Turkish government is now reportedly planning to institute new measures to serve as a custody middleman for cryptocurrency investors.

“The government is planning to establish a central custodian bank to eliminate counterparty risk following the collapse of the Thodex and Vebitcoin exchanges last week, according to a senior official familiar with the plans,” Bloomberg reported. “Authorities are also pondering a capital threshold for exchanges and education requirements for executives at such firms.

The plans are reportedly unfinalized, at least weeks away from being implemented and there were no details about how the rules would apply to bitcoin custody specifically. But presumably the world’s leading cryptocurrency would be included.

The implications of a central bank serving as a custodian for bitcoin exchanges are unprecedented. Bitcoin was designed as a financial vehicle that circumvents the policies and practices of central banks. By controlling the private keys for any bitcoin purchased on a Turkish exchange, the country’s central bank would ultimately have power over those funds. Only if users were to fully withdraw their bitcoin from the exchange, and therefore take control of the private keys from this custodian, could they really control an asset free from government oversight.

 

Ethiopia Links up With Cardano Creator to Launch the Country's Biggest Blockchain Deployment Yet

Reports from Ethiopia say the government has enlisted the services of software company IOHK in its bid to launch the country’s biggest blockchain deployment to date. As part of the agreement, the Cardano protocol creator will be tasked with the job of creating a blockchain-based national student and teacher identification system.

According to the government, this project is initially expected to involve more than five million Ethiopian students. Meanwhile, this link-up between these two parties has been hailed by both the Ethiopian government and IOHK. For instance, in his comments on the deal, Education Minister Getahun Mekuria, praised the project saying this would “make the nation’s education provision more dynamic.”

“Ethiopia’s blockchain-based education transformation is a key milestone on IOHK’s mission to provide economic identities and employment, social and financial services for the digitally excluded,” said O’Connor.

However, according to one report, there are expectations that this project could ultimately be extended to universities where degrees are also verified digitally on the Cardano blockchain. This function will allow employers to easily validate the authenticity of applicants’ educational credentials.

Meanwhile, the report also reveals Ethiopia is also examining wider adoption of IOHK’s Atala products such as the PRISM platform. On the other hand, IOHK also reveals that discussions on how to deploy a blockchain-based digital transport ticketing system in Addis Ababa is already underway.

 

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.